Utility-telecom providers need stronger partnerships

Utility telecom providers, commonly referred to as utelcos, must partner with other carriers and systems integrators to win a bigger piece of the communication technology market, according to one industry observer. But making partnerships work is a big challenge."I think it's time to look at this again," said Iain Grant, a principal with the SeaBoard Group, speaking at the Canadian Utility Telecom Conference on March 28 in Toronto.He noted that utelcos have a history of trying to partner with incumbent services providers such as Bell Canada and Telus Corp., but the attempts usually failed for legal reasons, logistics, and the fundamental belief among established players that utility telecom providers didn't fit into their network expansion plans.But times have changed, Grant said. For instance, many large service providers seek partners that understand specific local markets - something utelcos have a history of, meaning they might be ideal partners for incumbent operators.At the same time, utelcos need help capturing the attention of customers. SeaBoard estimates, utelcos have only 0.3% of the Canadian telecom market, while incumbent telephone companies Bell and Telus have 42% and 20.6%, respectively. Rogers Communications Inc. has 21%. Partnering with the ILECs could give utelcos another weapon in their arsenal to acquire customers. Incumbents, systems integrators and network hardware vendors are also potential utelco partners, he said. But utelcos must tread carefully and choose partners that know how to operate in a solid partnership. Some carriers seem to be getting the message. For instance, Telus recently agreed to make Telecom Ottawa its provider of choice in the Greater Ottawa Area, said Kal Amery, Telus' director of carrier relations and partner solutions. "They were committed to it," he said, indicating that even though Telus and Telecom Ottawa didn't always agree on the details, the companies hammered out a deal.Ron Rout, VP of network optimization at MTS Allstream Inc., pointed out that his company is open to utelco partnerships, just as it's open to partnerships with cable companies and other sorts of service providers. He said partnerships are particularly important for MTS Allstream's network expansion plans - in order to reach out, the company must have a helping hand in terms of IT and networking expertise. "There clearly is an opportunity," he said of aligning with a utility telecom provider. Despite a level of skepticism regarding utelcos and telcos partnering, conference attendees seemed optimistic about the idea. As another participant said, in the past telcos would only have come to conferences like this one to tell utelcos to forget about partnerships. This time, MTS and Telus came to say they were open to discussions.

Utility-telecom providers need stronger partnerships

News | March 30, 2007

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